Archive for Consumer Confidence

Euro to Dollar News 7th April 2009

Tuesday, April 7th, 2009

As outlined yesterday there is very little fundamental news on the economic calendar for the early part of the week and this is certainly reflected in today’s announcements for the euro to dollar pair for which there are only 2 of any consequence.   The first of these is the TIPP Diffusion Index which is based on a survey of around 1000 consumers which asks for their comments on the current economic climate, and interestingly also questions them on their confidence in the Federal Reserve’s economic policies.  As with many of these indices a result above 50 suggests optimism whilst below indicates pessimism and the forecast for this afternoon is for 45.1 against a previous of 45.3.  When plotted on a chart the figures have been steadily increasing from a low of 37.4 in July 2008 to today’s predicted at 45.1, but it is interesting to note that this index has remained below 50 for the last 2 years with only one exception in November 2008 when it marginally crept over the dividing line and recorded a figure of 50.8.

The last item of news is due out late this evening and is released by the Federal Reserve and measures the change in the total value of outstanding consumer credit and that which requires instalment payments.  The reason that it is important is that it is correlated with both consumer spending and also with confidence as rising levels of debt suggest that lenders are comfortable lending money and equally that consumers are confident to borrow and spend.  The forecast is for a figure of -2.2 billion against a previous of +1.8bn suggesting either that credit is contracting or consumers are unwilling to spend.  In the last 3 months this figure has showed some dramatic swings from a -7.9bn in January to a +1.8bn in March.   If the actual is better than the forecast then this should be good news for the US dollar.  Looking further ahead to tomorrow and Thursday on both days we have significant news items both in Europe and the US and these include FOMC minutes, crude oil inventories, German output and trade balance and unemployment claims in the US on Thursday.  Friday is a national holiday in many countries and you can find details on this by simply following the link.

You can keep up to date with all the latest currency news, live currency charts and fundamental news by simply following the appropriate links, and if you are looking for a good ECN broker I have provided more details here.

Euro to Dollar News : 31st March 2009

Tuesday, March 31st, 2009

Tiptoeing through the fundamental news from the economic calendar from this morning all Eurozone numbers came in worse than expected (other than Italian retail sales which posted much better than expected figures – as an Italian why does this not surprise me!!)  which has, so far, failed to dent this morning Euro’s rally.  The market is now waiting for some very important numbers starting with the Chicago PMI followed shortly afterwards by the red flag CB consumer confidence data.

The PMI data is a leading indicator and is based on a survey of purchasing managers in Chicago which asks them to rate the current business conditions including employment, production, new orders, prices and inventories and is released monthly.   This month’s figures will be particularly interesting given the problems in the US auto industry.  The data source is Kingsbury International and subscribers to the service receive the news 3 mins before the public release allowing them to trade the news in advance.  A figure above 50 indicates expansion whilst below indicates contraction and the forecast for this afternoon is for 34.3, virtually flat on last month’s number of 34.2.  15 mins later we have the CB Consumer Confidence number released by the Conference Board and again is a survey this time of 5000 households asking for a response on the current and future economic conditions.  Again this is considered a leading indicator and if the actual is better than forecast then this should be good news for the dollar.  Forecast is 26.8 against a previous of 25.

You can keep up to date with all the latest fundamental news developments, latest currency news on the economic calendar and live currency charts by simply clicking the appropriate links.  Finally if you are looking for a good ECN broker or fx broker simply follow the relevant link.

Euro to Dollar Fundamental News for 27th March 2009

Friday, March 27th, 2009

Although there no overtly “red flag” fundamental news items on the economic calendar today nevertheless there is a raft of data due to be released throughout the day affecting the euro to dollar pair.  The first of these is an interesting one and is the German Preliminary CPI which is actually drip fed into the market throughout the day as the various regions in German (of which there are 6) report their CPI figures at different times.  The preliminary release is the Eurozone’s earliest consumer inflation estimate and is given the size and current state of the German economy will be eagerly awaited.  These could come in at any time so just be aware of any peculiar and unexpected movements in currency pair today.  The forecast is for around 0.1%.

The next item on the economic radar for Europe is Industrial New Orders which is the change in the total of new purchase orders placed with manufacturers and is generally considered a leading indicator.   The forecast is for -5.7% against a previous of -5.2% indicating a further fall in this measure of economic sentiment.   If the actual is better than forecast then it will seen as positive for the Euro.

The focus now shifts to the US where the morning starts with Core PCE Price Index Data which measures the change in the price of goods and services purchased by consumers but excludes food and energy.  It differs from the Core CPI of yesterday as the index only measures those goods and services targetted at individuals.  Forecast is for 0.1% which is the same as last time. At the same time we have an index entitled Personal Spending which records the change in the total value of inflation adjusted expenditure by consumers.  The forecast here is for 0.2% against a previous of 0.6% and if the figures are better than expected we could see some positive dollar reaction.  This set of data rounds off with personal income which again is another index of income correlated spending which has a relatively minor impact on the market.

We round off the week with the revised UoM – University of Michigan consumer sentiment figures which is a composite index based on a survey of around 500 consumers which asks for their views on the current and future economic climate.  The survey assesses consumer confidence regarding personal finances, business conditions and purchasing power, and it is especially valued for its quick turnaround.  The University of Michigan Confidence survey is considered one of the foremost indicators of US consumer sentiment.  Declining consumer confidence levels usually accompany any fall in income or wages and precede drops in consumer spending. A low or falling UoM Sentiment value is considered an early indicator of an economic downturn. As a result, investors, retailers and traders alike all watch the figure for some  insight into the general health of the economy. UoM figures have recently a reliable forecasting tool in overall GDP.   The headline figure is calculated by subtracting the percentage of unfavorable replies from the percentage of favorable replies, and the forecast this time around is 56.7 against a previous of 56.6.

Attached to the UoM report is a further set of numbers which provide a view on inflation expectations and is based on a survey of consumers once again and their views on the expected price of goods and services over the next 12 months.

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